Establishment of international organizations such as the International Monetary Fund (IMF)
IMF began promotion of market economies, free trade, and high growth rates
Free Trade
Freedom from state-imposed limits and constraints on trade across borders
An issue was, to what extent does free trade enhance the prosperity of a society?
GATT and WTO
General Agreement of Tariffs and Trade (GATT)
23 noncommunist representatives signed the agreement in 1947
Later negotiations were held to loosening barriers of free trade
The total of 123 members in 1994 decided to make (WTO)
World Trade Organization (WTO) which took over the GATT's activities
WTO has turned into a forum to settle international trade disputes
Global Corporations
Have replaced traditional international or multinational forms of corporate enterprises
International companies were used to extend business on a global scale
There were more perks to a global corporation such as:
a small headquarters stakk
low operating costs
treat the world as a single market
Some global corporations include:
General Motors
Siemens AG
Nestle
-They all are benefiting from ongoing globalization.
-General Motors Corporation
Economic Growth in Asia
Economies in east and southeast Asia underwent high economic growth
This growth was due to globalization
Japan
US policies sparked economic revival in Japan
Japan benefited from Marshall Plan just as other countries
War reparations were pardoned
There were no trade restrictions
Japan no longer needed to spend money on military protections as the US was helping military protection
At first Japan's economy wasn't prepared (it had a large pop. and little resources
Economic leaders emphasized economic development and low wages with an export driven economy
The labor force was compliant
Labor was cheap
Japan churned out a lot of manufactured goods
Later Japanese corps. utilized highly trained workforce to create high quality goods
Japanese growth was not as sustainable into the 21st century
The Little Tigers
Other Asian economies copied Japan: Hong Kong, Singapore, South Korea, Taiwan
They suffered from the same problems as Japan, but found the same solutions
Soon they came Japan's competitors
Later Indonesia, Thailand and Malaysia joined
The Rise of China
Mao Zedong's economic policies were disastrous
Later China's leaders began reversing the other policies and opening up
Created Socialist Market Economy
The role of the government was limited
It was a major exporter and also had cheap labor and enormous domestic markets
It has brought in investment from the world
Joined World Trade Organization in Deccember 2001
Perils of the New Economy
Globalization exhibited promise of economic growth
Asian tigers however soon went to bust economies
This bust was due to an financial crisis in 1997
There was much investment in the Asian tigers, and a sudden lack of confidence led to a crash in the markets
Trading Blocs
Soon trade was opened signalling the interdependence of the global economy
Many countries created economic alliance with trade to build economic strength
European Union
The most integrated trading bloc is the European Union
The original members (France, West Germany, Italy, Netherlands, Belgium, Luxembourg) formed the European Economic Community in 1957 with the the Treaty of Rome
Renamed the European Community in 1967
Its goal was trade liberalization
It created the Council of Ministers and the European Parliament to work towards European political integration
European Union in present form was created in 1993 Maestricht Treaty
Originally had 15 nations with common currency (euro)
OPEC
One of the most effective economic alliance: Organization of Petroleum Exporting Countries
Created in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, later joined by Qatar, Libya, Indonesia, Abu Dhabi, Algeria, Nigeria, Ecuador, Gabon
They sought raising the price of oil through cooperation and held political power as demonstrrated by the Arab Israeli War when OPEC plunged the world into recession
The influence declined in the 80s and 90s as a result of overproduction and disagreement
ASEAN
Association of Southeast Asian Nations
Established 1967 by Thailand, Malaysia, Singapore, Indonesia, Phillipines
Sought to accelerate economic development and promote stability
It was originally established to stop the spread of communism but took more of an economic focus after Japan joined and cooperdated with the European Community
IN 1992 they agreed to a 15 year free trade zone
NAFTA
The US also needed a regional trrade bloc
It entered the North American Free Trade Agreement with Canada and Mexico in 1993
It is the second largest free trade zone, though it is looser than the European Union
Globalization and Its Critics
There is much disagreement over whether globalization is good or bad
Supporters say:
It will bring prosperity, it is the only way
It delivers markets with maximum efficiency
Always directs goods to where they are demanded
Critics say:
It is an unregulated juggernaut that is not desirable
It impoverishes many
It diminishes national sovereignty
Transfers power to transnational corporations and global institutions (WTO, IMF)
Rapid economic development leads to environmental destruction, income inequality, cultural assimilation
The Global Economy (Pgs. 1131-1138)
Economic Globalization
- Establishment of international organizations such as the International Monetary Fund (IMF)
- IMF began promotion of market economies, free trade, and high growth rates
Free Trade- Freedom from state-imposed limits and constraints on trade across borders
- An issue was, to what extent does free trade enhance the prosperity of a society?
GATT and WTO- General Agreement of Tariffs and Trade (GATT)
- 23 noncommunist representatives signed the agreement in 1947
- Later negotiations were held to loosening barriers of free trade
- The total of 123 members in 1994 decided to make (WTO)
- World Trade Organization (WTO) which took over the GATT's activities
- WTO has turned into a forum to settle international trade disputes
Global Corporations- Have replaced traditional international or multinational forms of corporate enterprises
- International companies were used to extend business on a global scale
- There were more perks to a global corporation such as:
- a small headquarters stakk
- low operating costs
- treat the world as a single market
- Some global corporations include:
- General Motors
- Siemens AG
- Nestle
-They all are benefiting from ongoing globalization.-General Motors Corporation
Economic Growth in Asia
- Economies in east and southeast Asia underwent high economic growth
- This growth was due to globalization
- Japan
- US policies sparked economic revival in Japan
- Japan benefited from Marshall Plan just as other countries
- War reparations were pardoned
- There were no trade restrictions
- Japan no longer needed to spend money on military protections as the US was helping military protection
- At first Japan's economy wasn't prepared (it had a large pop. and little resources
- Economic leaders emphasized economic development and low wages with an export driven economy
- The labor force was compliant
- Labor was cheap
- Japan churned out a lot of manufactured goods
- Later Japanese corps. utilized highly trained workforce to create high quality goods
- Japanese growth was not as sustainable into the 21st century
- The Little Tigers
- Other Asian economies copied Japan: Hong Kong, Singapore, South Korea, Taiwan
- They suffered from the same problems as Japan, but found the same solutions
- Soon they came Japan's competitors
- Later Indonesia, Thailand and Malaysia joined
- The Rise of China
- Mao Zedong's economic policies were disastrous
- Later China's leaders began reversing the other policies and opening up
- Created Socialist Market Economy
- The role of the government was limited
- It was a major exporter and also had cheap labor and enormous domestic markets
- It has brought in investment from the world
- Joined World Trade Organization in Deccember 2001
- Perils of the New Economy
- Globalization exhibited promise of economic growth
- Asian tigers however soon went to bust economies
- This bust was due to an financial crisis in 1997
- There was much investment in the Asian tigers, and a sudden lack of confidence led to a crash in the markets
Trading Blocs<iframe frameborder='0' height='404' scrolling='no' src='http://www.meograph.com/embed/cochristiancy/47260/the-european-union' width='560'></iframe>